The proopiomelanocortin (POMC) gene is expressed in a tissue-specific manner in the pituitary, hypothalamus and testes. The POMC gene is negatively regulated at the transcriptional level by glucocorticoids and positively regulated by ligands that stimulate the protein kinase C and CAMP signal transduction pathways. It is therefore possible to examine tissue-specific, negative and positive transcriptional control mechanisms using the POMC gene as a paradigm. These studies initially focused on the negative regulation of transcription by glucocorticoids. Previous studies have demonstrated that a glucocorticoid receptor binding site centered at -63 may be involved in negative regulation. Although the mechanism of repression is unknown, one possibility is that receptor interaction with this sequence may displace a positive transacting factor that normally occupies this position. Using a combination of methods to detect protein-DNA interactions we have defined 5 factors (PO-A,B,C,D,and E) that bind between -63 and the POMC CAP site. To determine the functional significance of these sites and their possible involvement in negative regulation, we have made a series of deletion and oligonucleotide-directed mutations in the POMC promoter linked to the firefly luciferase reporter gene. After transient transfection of these vectors into the ATt-20 pituitary tumor cell line, we have determined that a number of these mutations appear to decrease the basal transcription of the POMC gene. A particularly interesting mutation involves the PO-B site situated over the POMC CAP site that defines a novel transacting CAP binding factor distinct from classic TATA binding proteins. We have determined that the effects of these mutations can be mirrored in in vitro transcription assays. In future experiments this technique will enable more detailed analysis of the role of these transacting factors in transcription complex formation.